Africa needs USD360bn in infrastructure
The African Development Bank President has called for inclusive growth by creating youth employment, improving agricultural output and investing in quality education and infrastructure.
In a public lecture delivered in Kampala, Uganda, AfDB President Donald Kaberuka said the continent’s demographics pointed to an explosion in the numbers of young people, though employment creation was not keeping pace. He lamented the fact that youth unemployment, at 20% last year, remains way above the global average of 10%.
“The quality of Africa’s growth during the past decade has not been inclusive, with too few jobs created especially for the young people in the booming economies. The events of the Arab Spring have shown us the paradox of high growth and rising inequality and unemployment (which) requires all of us to reflect seriously on the causes,” said Kaberuka.
Kaberuka said Africa has to continue investing heavily in infrastructure if it is catalyze growth, adding that Africa requires USD360 billion in infrastructure investments over the next 30 years, while the energy needs will also multiply.
These kinds of investments requires innovative financing, such as issuance of infrastructure bonds, which have become important for the mobilization of infrastructure financing and the development of domestic capital markets.
Kaberuka argued that economic transformation is characterized by at least three key features, starting with the structure of the economy changing to depict an increase in the share of manufacturing, coupled with a sustained decline in the share of agriculture.
This is followed by the share of agriculture employment falling, while the share of total labour force in other sectors of the economy increases, and finally, economic activity shifts from rural areas to the cities leading to an increase in the degree of urbanization.
“Therefore, economic transformation is a comprehensive change that encompasses the modernization of a country’s economy, society and institutions. In countries where economic transformation has taken place, the middle class has become larger; changes have happened in the way politics works, with emphasis on market-friendly policies; and government has become more effective,” said Kaberuka.
In all cases, where economic transformation has succeeded, the articulation of a national vision to motivate the people has been crucial.
He added that though African countries have made valiant efforts towards freeing the continent from ignorance, poverty and disease, more needed to be done.
“For while you can have growth without economic transformation, you can never have economic transformation without growth,” said Kaberuka.